Home sellers can’t expect a “golden deal” on their property and should readjust their expectations as prices fall, real estate experts warn.
The warning follows the 14th straight rise in interest rates that has put mortgages out of reach for many.
It means that asking prices may need to be lowered to secure a committed buyer.
Median house prices have fallen from £293,992 last August to £285,044, according to Halifax.
North London estate agent Jeremy Leaf explained: ‘Rising expectations that inflation and interest rates are nearing their respective peaks, combined with continued strong employment, are helping to prop up activity.
“Affordability remains a concern, especially for those on tighter budgets, who often buy smaller properties to keep the market price sensitive.
“However, sellers who recognize the importance of actionable buyers and that the illusory golden offer may not be achievable are taking advantage.”
Average property price declines have been revealed in the latest Halifax Home Price Index.
His comments follow the latest data from Halifax, which revealed median house prices fell from £293,992 in August last year to £285,044 last month.
It read: “Continued tightening of affordability will mean restricted market activity persists, and we expect house prices to continue to fall next year.”
Borrowers are under pressure amid sharply rising mortgage rates.
The average two-year fixed-rate mortgage has shot up from 2.34 percent in December 2021 to just 7 percent today.
The average two-year fixed-rate mortgage rate today is 6.85 percent, according to Moneyfacts.
There are committed buyers who want to move, but are also increasingly price sensitive
Jason Tebb of property website OnTheMarket.com said: “As the annual decline in average property prices continues, the high cost of living and numerous rate increases are affecting how much homeowners are willing and able to pay. buyers for their next home.
“However, given all the economic uncertainty, it is remarkable how relatively stable the market appears to be after a period of unprecedented house price growth fueled by a lack of supply and demand.
‘There are committed buyers who want to move, but are also becoming more price sensitive.
‘Motivated sellers should seek the advice of an experienced agent who understands the market in their area, making sure they price sensibly to achieve a timely sale.’
Halifax has revealed the annual and monthly change in house prices over the past year
Home sellers need to be realistic about sales price expectations, experts warn
Nicky Stevenson of estate agents Fine & Country said: “While prices are likely to continue to cool further, it should be at a much slower pace than originally anticipated.”
‘It looks even more likely that the property market will have a soft landing, and this is partly due to a large group of motivated buyers who are still buying reasonably priced properties.
“Smaller homes in affordable locations near major employment hotspots are the biggest draw right now, and are also drawing first-time buyers to the market.
‘There is some evidence that mortgage interest rates are having the biggest impact on the higher value portion of the market, particularly for the larger three- and four-bedroom family homes.
‘The south of England, which has some of the most expensive properties in the country, is seeing a further drop in prices as buyer affordability dwindles.
“A slowdown in rate hikes, if inflation continues to be brought under control, could start to ease those pressures in the coming months.”